Friday 09 December 2022
The Committee for Economic Development is continuing to progress measures which will improve consumer protection in the lending and credit sector.
At its most recent States Meeting, the States approved the commencement ordinance for the Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022 (the 'LCF law'), meaning it can come into force in 2023. This follows a policy letter brought to the States by the Economic Development and Policy & Resources Committees in 2021.
The LCF Law will introduce an improved and enhanced regulatory regime for businesses involved in providing lending, credit and finance to consumers.
In the previous month, the States also supported the Committee forEconomic Development's proposal to introduce Low Value Debt Relief ('LVDR') legislation. Once in place, this legislation will provide a safety net for local residents who may find themselves in difficulty because of low amounts of debt that result from a significant change in their personal circumstances, and which they have no reasonable way of paying due to their limited financial means. While there will be strict eligibility criteria, as part of the legislation, the introduction of LVDR will make a real difference to the small number of people who find themselves in this very difficult situation, often as a result of a change in circumstances in their lives.
Deputy Nick Moakes, finance sector lead for the Committee for Economic Development said
"We hope these measures both contribute towards greater protection for consumers, while at the same time being proportionate. In some cases people can find themselves in financial situations that cause enormous stress and poor mental health and it's right we look to put support in place for them, but also it helps to improve customer confidence more widely. That is good for the reputation of the sector, Guernsey as a jurisdiction and, ultimately, the economy as a whole."
Annie Ashmead, Citizen's Advice Guernsey Interim CEO said
"When considering writing off a person's debts there will always be a different view between the two camps; 'requirement to pay' versus 'right to start again'. The LVDR order is a first step in the 'right to start again' camp. It will require a material deterioration in personal circumstances to fit the bill. However, unemployment, relationship breakup, demise of a partner, illness and injury can happen to anyone at anytime. We feel that this is a proportionate first step in allowing a small number of individuals to be able to 'start again' provided that their total debts are not too high."